Although rumors have been running rampant since this morning, it's now official — they'll be combining in a $13 billion "merger of equals." Where have I heard that before? Oh wait, yeah — isn't DaimlerChrysler trying to sell off one of those "equals" as we speak? Anyway, here's the press release — hot off of wherever it is press releases come from these days:

*Mel Karmazin to Serve as Chief Executive Officer and Gary Parsons to Serve as Chairman of Combined Company

WASHINGTON and NEW YORK, Feb. 19 /PRNewswire-FirstCall/ — XM Satellite Radio (NASDAQ: XMSR) and SIRIUS Satellite Radio (NASDAQ: SIRI) today announced that they have entered into a definitive agreement, under which the companies will be combined in a tax-free, all-stock merger of equals with a combined enterprise value of approximately $13 billion, which includes net debt of approximately $1.6 billion.

Under the terms of the agreement, XM shareholders will receive a fixed exchange ratio of 4.6 shares of SIRIUS common stock for each share of XM they own. XM and SIRIUS shareholders will each own approximately 50 percent of the combined company.

Mel Karmazin, currently Chief Executive Officer of SIRIUS, will become Chief Executive Officer of the combined company and Gary Parsons, currently Chairman of XM, will become Chairman of the combined company. The new company's board of directors will consist of 12 directors, including Messrs. Karmazin and Parsons, four independent members designated by each company, as well as one representative from each of General Motors and American Honda. Hugh Panero, the Chief Executive Officer of XM, will continue in his current role until the anticipated close of the merger.

The combined company will benefit from a highly experienced management team from both companies with extensive industry knowledge in radio, media, consumer electronics, OEM engineering and technology. Further management appointments will be announced prior to closing. The companies will continue to operate independently until the transaction is completed and will work together to determine the combined company's corporate name and headquarters location prior to closing.

The combination creates a nationwide audio entertainment provider with combined 2006 revenues of approximately $1.5 billion based on analysts' consensus estimates. Today the companies have approximately 14 million combined subscribers. Together, SIRIUS and XM will create a stronger platform for future innovation within the audio entertainment industry and will provide significant benefits to all constituencies, including:

* Greater Programming and Content Choices — The combined company is

committed to consumer choice, including offering consumers the ability

to pick and choose the channels and content they want on a more a la

carte basis. The combined company will also provide consumers with a

broader selection of content, including a wide range of commercial-free

music channels, exclusive and non-exclusive sports coverage, news,

talk, and entertainment programming. Together, XM and SIRIUS will be

able to improve on products such as real-time traffic and rear-seat

video and introduce new ones such as advanced data services including

enhanced traffic, weather and infotainment offerings.

* Accelerated Technological Innovation — The merger will enable the

combined company to develop and introduce a wider range of lower cost,

easy-to-use, and multi-functional devices through efficiencies in chip

set and radio design and procurement. Such innovation is essential to

remaining competitive in the consumer electronics-driven world of audio

entertainment.

* Benefits to OEM and Retail Partners — The combined company will offer

automakers and retailers the opportunity to provide a broader content

offering to their customers. Consumer electronics retailers, including

Best Buy, Circuit City, RadioShack, Wal-Mart and others, will benefit

from enhanced product offerings that should allow satellite radio to

compete more effectively.

* Enhanced Financial Performance — This transaction will enhance the

long-term financial success of satellite radio by allowing the combined

phone streaming, satellite radio will face new challenges from the rapid

growth of HD Radio, Internet radio and next generation wireless

technologies.

"We are excited for the many opportunities that an XM and SIRIUS combination will provide consumers," said Gary Parsons, Chairman of XM Satellite Radio and Hugh Panero, CEO of XM Satellite Radio, in a joint statement. "The combined company will be better positioned to compete effectively with the continually expanding array of entertainment alternatives that consumers have embraced since the Federal Communications Commission (FCC) first granted our satellite radio licenses a decade ago."

"This combination is the next logical step in the evolution of audio entertainment," said Mel Karmazin, CEO of SIRIUS Satellite Radio. "Together, our best-in-class management team and programming content will create unprecedented choice for consumers, while creating long-term value for shareholders of both companies. The combined company will be positioned to capitalize on SIRIUS and XM's complementary distribution and licensing agreements to enhance availability of satellite radios, offer expanded content to subscribers, drive increased advertising revenue and reduce expenses. Each of our companies has a strong commitment to providing listeners the broadest range of music, news, sports and entertainment and the best customer service possible. We look forward to sharing the benefits of the exciting new growth opportunities this combination will provide with all of our stakeholders."

The transaction is subject to approval by both companies' shareholders, the satisfaction of customary closing conditions and regulatory review and approvals, including antitrust agencies and the FCC. Pending regulatory approval, the companies expect the transaction to be completed by the end of 2007.